OAN Staff James Meyers
9:32 AM – Wednesday, December 11, 2024
The latest report revealed by the Labor Department showed that U.S. inflation rose in November from the pace it set a month earlier, going up for the second month in a row. This comes as the Federal Reserve determines how quickly to press ahead with cutting interest rates.
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The Consumer Price Index (CPI) increased 2.7% compared to a year ago last November, above the 2.6% increase seen in October, but falling in line with expectations, the Labor Department said on Wednesday.
Month-over-month, the CPI also rose 0.3%, above economists’ expectations of 0.2%.
Additionally, the report revealed that inflation rose 3.3% compared to a year ago in November.
“The increase in the inflation rate won’t be enough to spoil Christmas,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.
“The headline CPI was consistently above 3% in the beginning of the year and now it is consistently below 3%, so despite the fact that the series is a little noisy from month-to-month, we believe the Fed is likely to look through these fluctuations and continue on their easing path,” he added.
Meanwhile, interest rates are set to 4.6%, above the 2.9% “neutral” rate that officials believe would help the economy chug along at a steady pace.
Additionally, investors largely expect a third round of interest rate cuts from the Federal Reserve during their December 17th-18th meeting, but the Fed Chair Jerome Powell has recently said there would be cautionary movement going forward.
“We can afford to be a little more cautious as we try to find neutral,” Powell said at a New York Times event last week.
During a press conference in November, he said: “Really the question is – is December….By December, we’ll have more data.”
Furthermore, investors odds of a quarter-point rate cut increased to a staggering 99.9% after the inflation report, which is up from 86.1% Wednesday morning, according to CME FedWatch.
Despite inflation staying above 2%, the central bank slashed its key lending rate by a half point in September and again by a quarter point in November after President-elect Donald Trump’s victory.
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